Customer Experience – Designed for Churn

Given the challenges of attracting new customers, one would expect to optimize business processes to prevent them from leaving. Surprisingly it is often feels like companies design their operations to deliver customer churn. Some of it is a result of dismal execution of really good ideas. The others can only be explained by either arrogance or ignorance.

Here are two examples:

Two years ago I purchased a brand new car from the neighborhood Nissan dealer. The transaction was smooth and not stressful. I was quite impressed with the salesperson’s statement saying how happy they are to see a new customer who lives nearby because their service department is an important profit center that delivers great experience. Car salesmen are not known for their understanding of the CLV (Customer Lifetime Value) concept.I also remember being quite impressed receiving the invitation for an introductory first service when the time came. I did wonder why they snail-mailed a link to their website to book an appointment instead of emailing it to me. It would be much easier to click on an inserted link than re-entering it from a piece of paper, but why focus on small details? I followed the instructions to book an appointment and showed up at appropriate time to find out that the service department did not get me scheduled for service because of the website “glitch.” The service was good, but the experience was not, as I spent much more time waiting than expected.The invitation for the next service came again by mail and this time I wanted a confirmation that my booking was accepted. The website booking process did not give me one, so I called. That was not a good experience as nobody seem to know whether the appointment was booked or how to confirm it. The line about the “glitch” came again with promises of imminent repair.Since then I’ve done all my service with a local garage. The formal snail mail invitations keep reminding me that my next car will not be a Nissan, even though I had no problem with the car itself.

Last year we signed up for internet service through ATT that promised really good monthly rate for the first six months to help us experience their wonderful speed and uptime. Both were quite acceptable, if not wonderful, for the price. When regular price kicked in, after the introductory offer expired, the service seemed to be still acceptable, but not wonderful anymore.A few months later I noticed the monthly bill amount mysteriously raised by a substantial percentage, and I called the company. I was told that they sent me a notification that they would be improving my service and raising the price, and I failed to opt out. Since I also failed to notice any measurable improvement, I opted out of their service completely to accept a generous introductory offer from their competitor.

This opt-out practice is not unique to ATT; TV service providers also use it commonly. Internet Service Providers and TV Service Providers are notorious for being on the bottom of customer experience delivery rating. Opinion mining their customers reveals that this is one of the most hated attributes of their experience. It infuriates the customers and makes them feel cheated by the companies. These companies must be aware of it, but they seem to think that their government-protected status exempts them from the rules of the markets.

Meanwhile, a relatively small, but fast growing segment of the market is “cutting the cord”. They move off the entertainment grid to alternative providers – Netflix, Amazon, Google, etc. This group figured out long ago that in order to prosper you need to figure out what customers really want (quality content) and how they want to consume it (binge, a la carte, etc), then deliver it with the least amount of friction.